Published 12:00 am, Thursday, September 23, 2010

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ALBANY -- Gov. David Paterson sent another shock wave rippling through the state's vast work force last week when he issued his most unequivocal statement yet about his intention to lay off workers before the end of the year.

The remark -- made before a group of business and civic leaders in New York City -- prompted the Civil Service Employees Association to file a grievance with the state. CSEA argues that the Paterson administration last year signed a binding no-layoff pledge through the end of this year for its members and another union, the Public Employees Federation.

The governor said the layoffs were speeding up since the state won't save enough money from its early retirement incentive, which more than 5,000 people will likely be taking. That's from a state agency work force of approximately 131,000.

But the process of laying off state workers is governed by complicated and arcane rules regarding seniority and other protections. The effort appears to be creeping along in low gear, if at all.

Officials with the state Budget Division say they're planning for layoffs even though there have been no memorandums or other written guidance sent to state agencies about how the cuts would proceed, or precisely when they would begin.

"We're still working through that process," Budget spokesman Erik Kriss said.

Meanwhile, frustration is growing among some of the hundreds or even thousands of state employees who wanted an early retirement incentive but were turned down.

Under Part A of the incentive, employees' jobs had to be targeted -- that is, their supervisors had to agree that their positions could be permanently eliminated. For that, 4,675 people have been approved. If they all decide to leave by the deadline at the end of this month, the state is on track to save $130 million for the reminder of this fiscal year, which ends March 31.

But that sum is just over half of the $250 million in work force savings called for in the current 2010-11 budget.

Budget officials expect that no more than 1,000 workers will take the Part B early retirement. Under that plan, employees aged 55 and older can retire after 25 rather than 30 years on the job. Their jobs don't have to be targeted, but the employees must apply on their own.

Supervisors, however, can turn them down for the Part B incentive if their job entails a health or public safety role.

There are indications that some agency managers may be taking an expansive view of health and public safety -- at least when it comes to denying early retirement incentives.

"I had my whole head set on it," said one state employee, who works in a supervisory role at a major state agency. He didn't want to be named for fear of angering his supervisors, but said he doesn't provide direct care and isn't involved in health or hands-on safety issues.

Thinking he would get the 55/25 incentive, he used up some accrued vacation time during the last few weeks and purchased a home out of state. When he returned, he was told he couldn't get the incentive.

He calculated that with his salary, which is close to $90,000, the state would have saved $37,000 had he been granted the retirement incentive.

Now he'll remain on the job for two more years. "It's ludicrous not to let me go," he said.

The precise number of people who sought early retirement may never be known, since those in Part A had to be targeted and there is no registry of those who wanted it.

But PEF officials says they have a list of 617 members who wanted the incentive but were turned down. They estimate there could be 600 more in other unions, or who are not represented.

The union contends it's cheaper to give the incentive than to lay off an employee, who will then collect unemployment insurance.

According to PEF's calculations, the average early retirement would save $30,371 for half of a fiscal year, compared to $25,371 saved by a layoff, which could require unemployment benefits. That calculation changes as time goes on, since the retirement incentive costs are amortized over time.

Paterson is certainly looking for savings.

In addition to the 2010-11 budget's call for $250 million in work force savings, the spending plan also seeks $250 million in state agency savings. With the various agencies already cutting many of their expenses -- from travel costs to purchases of office supplies -- state officials may have to look at even deeper layoffs to reach their financial goals by the end of this fiscal year.